National Economic Council (NEC) chief Larry Kudlow told CNBC that the China coronavirus situation is expected to have an impact on U.S. exports to China, likely delaying the increase outlined in the phase-one trade deal.
“The export boom from that trade deal will take longer because of the Chinese virus,” Kudlow said of the pledge by China to boost its purchases of U.S. ag, energy, services and manufactured goods.
Meanwhile, former White House aide Clete Willems said the U.S. would need to show some understanding with China on the trade front as the country confronts the coronavirus situation. "We simply do not know the scope of this and what the economic impact is going to be. It does mean that in the short term it is going to make it difficult to make progress on phase two, and there will be a conversation with respect to implementation,” Willems told Reuters in Washington.
As for the impact to the U.S. economy, Kudlow said it would be “minimal,” and the U.S. was ready to help China.
“We would like to make them as healthy as we can,” he said. Expectations are the situation could trim U.S. GDP by 0.2 percentage points in the first quarter and another 0.2 percentage points later in the year.
“It is not a catastrophe. It is not a disaster. I think people should be very calm about this,” Kudlow said. “This is not going to be that big a deal for us.”
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